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Capital ratios at Europe's largest banks, Q1'19

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Capital ratios at Europe's largest banks, Q1'19

Most European banks saw their capital ratios fall in the first quarter, with Finland-based Nordea Bank Abp registering the sharpest drop compared to the fourth quarter of 2018.

Nordea's common equity Tier 1 ratio fell by 90 basis points on a quarterly basis. On a year-over year basis, its ratio dropped by some 520 basis points, while that of Sweden-based Skandinaviska Enskilda Banken AB dropped by 197 basis points year over year.

Among the sample of 35 banks compiled by S&P Global Market Intelligence, 19 reported a quarter-over-quarter reduction in their CET1 ratios.

The metric quantifies a bank's CET1 capital as a percentage of risk-weighted assets. Banks in Europe must have a fully loaded CET1 ratio of at least 7%, comprising a minimum 4.5% common equity Tier 1 ratio and a 2.5% capital conservation buffer. Certain banks might be susceptible to supplementary local capital buffer obligations.

In actual terms, Italy-based Banco BPM SpA was bottom of the list, with 10.78% at the end of the first quarter. The U.K.'s Nationwide Building Society had the highest ratio, at 32.35%.

SNL Image

SNL Image

See a section dedicated to capital adequacy for your bank. Search for the company in the top search box and go to the "Capital Adequacy" section, housed under the Templated Financials on the left-hand panel. Here is an example for Banco Santander SA.

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